But isn't the p/e artificially low due to the infrastructure reinvestment? If Amazon said today "We are happy with our business model and will just spend money on maintaining not growing" how much profit would they take in?

I mean just read this to see all the ridiculous new products they are coming out with that will add to future revenue growth.

AmazonPantry- Grocery delivery that may actually work

AmazonDash- Easily reorder items by scanning barcodes of items or use microphone to order items you can't scan

AmazonTV- looks to be a legit contender in instant streaming. Added HBO shows which is unreal since Netflix could never close that deal

AmazonPhone

Basically everything they do feeds back into their business model. Once you get sucked in you won't be able to leave. Huge reason why they still see growth in AmazonPrime despite raising cost

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Posted by Iowa Golfer

Heaven

Member since Dec 2013

10232 posts

Posted on 4/25/14 at 10:36 pm to GenesChin

I don't think so. There p/e being artificially high that is. I'm concerned with their retail heavy model and their ratios. If they had long term debt of any significance, which they claim not to, at least not a great amount, I see no reason why they couldn't finance their growth from revenue, which presumably they are doing, and pay a dividend. And yet they don't.

That's just me. Something valued at over 500X earnings had better be growing a lot faster than this, especially a retail based, highly sensitive to consumer confidence sales model.

To me they are set up somewhat like Google. They'll need to buy competitors, and every thing that comes close to eating in to their market share.

This post was edited on 4/25/14 at 10:43 pm

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